Zero Inflation Targets: Central Bank Commitment and Fiscal Policy Outcomes
AbstractThis paper considers a central bank with a zero inflation target and a fiscal authority with a differing objective. Situations under which the fiscal authority is able to exploit the central bank's commitment to zero inflation are examined. An example using a calibrated model shows that, in practice, it may be irrelevant whether or not the fiscal authority is aware of the central bank's objective.
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Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 1996 with number _055.
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Postal: Department of Econometrics, University of Geneva, 102 Bd Carl-Vogt, 1211 Geneva 4, Switzerland
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